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Accounting Homework Help
Accounting Homework Help
Youare a manager of the clinical laboratory in a medical center. Thelab is going through an expansion stage and top management hasasked you to select and present the rationale the alternative thatwill provide the greatest expected monetary value and the lowestrisk cost. One alternative is to remodel the current lab with moremodern fittings and the other is to acquire and construct a labaddition in the space next door. Remodeling cost to the lab, ifequipment is available locally is $90,000. There is a 60/40 chancethat the equipment will not be available locally and will need tobe brought in from another state which will cost $150,000.
To construct a lab next door will take a lot of work. Theprice of the space next door is $500,000. A local builder hasprovided a best cost of $110,000 and a worst cas if $200,000. Thebest case is 65% likely.
Draw a decision tree and calculate the Expected monetaryvalue. Which alternative will you recommend?
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15 Oct 2017
Due Date: 16 Oct 2017
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